DTN Midday Grain Comments 11/11 10:58
KC Wheat Is Midday Leader; Rest of Grains Lagging
Corn is 2 to 3 cents lower, soybeans are 9 to 10 cents lower and wheat is 2
cents lower to 3 cents higher at midday.
By David Fiala
DTN Contributing Analyst
The U.S. stock market is weaker with the Dow down 115. The dollar index is
20 lower. Interest rate products are not trading in observance of Veterans Day.
Energies are mixed with crude down $0.30. Livestock trade is mixed. Precious
metals are weaker with gold down $6.50.
Corn trade is 2 to 3 cents lower at midday with spillover pressure from
soybeans and outside market uncertainty, along with harvest pressure moving
trade back to the lower end of the range to start the week. The weekly USDA
Crop Progress and Export Inspections reports are delayed due to Veterans Day as
well. In the USDA reports Friday, yield declined 1.4 bushels per acre (bp) to
167.0 bpa with acres unchanged to put production at 13.661 billion bushels
(bb), down from 13.779 bb last month vs. expectations of 13.575 bb, and
carryout at 1.91 bb vs. 1.799 bb expected with reductions to exports and
ethanol. Harvest will be slowed the first part of the week with a cold front
bringing some snow before the weather opens up again the second part of the
week. Ethanol margins remain stable. Ethanol futures are slightly higher to
start the week, helping to support blenders with unleaded still near the recent
highs. Basis should see more pressure as harvest progresses as we move to the
back half nationally. South America should see areas of improvement as planting
progresses. On the December contract, support is the $3.71 lows from October,
with resistance the spike high from Friday at $3.83 3/4.
Soybeans are 9 to 11 cents lower at midday with Hong Kong unrest raising
trade anxieties again, with little fresh bullish news. Meal is $2.50 to $3.50
lower, with oil narrowly mixed. In Friday's USDA reports, yield and production
were unchanged at 46.9 bpa and 3.55 bb, and carryout was raised to 475 million
bushels (mb) from 460 mb last month. The real has surrendered all of the recent
gains again after the release of former Brazilian President Luiz Inacio Lula da
Silva, hurting U.S. competitiveness. Bean basis should see pressure start to
fade. South America should make more progress through the week with improved
weather, and Brazil heading toward the planting homestretch. On the January
chart, support is $9.00 after trade broke below the lower Bollinger Band at
$9.22 this morning.
Wheat trade is 2 cents lower to 3 cents higher with spillover from the row
crops pressing trade back into support levels to start the week and KC finding
some buying interest during the day session. The Chicago/KC December spread is
85 cents with narrower action, and now about 15 cents from the recent highs.
The corn/hard red winter wheat spread has widened back to 50 cents, keeping
wheat out of rations. Russian values remain elevated with Australia dry, but
the U.S. is still struggling to capture a larger share, with the dollar
remaining at the upper end of the range. The WASDE report showed carryout at
1.014 billion bushels, down from 1.043 bb last month. The December KC chart
support is the 20-day at $4.23, which we are around at midday, then the lower
Bollinger band at $4.15 below that. The upper Bollinger band at $4.32 as
David Fiala is a DTN contributing analyst and the President of FuturesOne
and a registered adviser.
He can be reached at email@example.com
Follow him on Twitter @davidfiala
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